Technology is here to help advisors, not replace them

Alex Veilleux, chief innovation officer and product strategist at tech company Vooban, says he is confident that financial advisors will still have work despite the emergence of new technologies. They will see an evolution of their work rather than its disappearance, he says.

At the 2017 Insurance and Investment Convention, held on Nov. 14 in Montreal, he said that advisors will see their tasks that have little value be minimized and automated through technology.

Veilleux said he has noticed clear interest from major financial institutions in new technologies. He says that most of them realize that they need to interact and partner with fintech and insurtech companies.

For Veilleux, the major transformations in the industry will come from such partnerships. “There are, however, several challenges that arise. Large institutions do not always have the reflexes and the same momentum that a new one can have. That’s why I continue to help financial institutions launch technology projects faster with Vooban. They disguise themselves as startups to take advantage of major transformations.”

Optimizing distribution

Veilleux cited the example of the American insurtech Haven Life, which belongs to the insurer Mass Mutual. Haven Life excels in the exploitation of data held by the insurer. It uses artificial intelligence to optimize underwriting and distribution processes.

“Haven Life has worked with all regulators in all states to bring their new approach to product distribution and sales. This is a clear indicator that, regardless of the volume of premiums underwritten, this type of offer is here to stay,” said Veilleux.

Customer experience

The main reason why all these technological changes are at the forefront of the industry is customer experience, says Veilleux. “There is a great evolution in the ways in which we are buying things, whether it’s a car, groceries or even a house. To me, the challenge managing general agencies and advisers are facing is how to optimize and find their place in these changes.”
However, he believes that young people, though they turn to social networks for information, can’t do without the advice offered by professionals. “Our social networks do not know all the subtleties of our financial needs. This is where the advisor needs to find a way to fit into the new generation and how they shop, to make sure they buy the right product.”

One problem is that simplified products are often the only option available to the consumer who wants to shop in a 100 per cent digital way, says Veilleux. This is a concern if these products are not the right ones for the client, he said.

“What I see is that there is a possibility that there will be a generation which is badly advised and ends up with the wrong product. I am thinking, for example, of the proliferation of term life insurance products, when every individual’s circumstances are not the same,” said Veilleux.

He advocates for the use of technology with an educational approach, as Haven Life is now doing. It launched a robo-advisor on the Facebook Messenger platform that answers users’ questions.

Education-based approach

“Rather than focusing their approach on sales and distribution, they have instead opted for an education-based approach. They want to make consumers realize the real cost of protection through dialogue with artificial intelligence and machine learning. Haven Life uses this method to get the consumer to take a step towards purchasing a financial product, knowing that young people seem to have less inclination to do so,” he said.